In SentinelC3, Inc. v. Hunt (No. 89317-9), the Washington Supreme Court unanimously held that a dissenting shareholder’s belief that the non-dissenting shareholders “concocted a plan” to force him out of the corporation and artificially diminish the value of his shares did not create a genuine issue of material fact precluding entry of summary judgment on the value of his shares, nor did counsel’s affidavit attaching “a true and accurate copy” of a valuation expert’s report do so.


On October 28, 2010, a majority of SentinelC3, Inc.’s shareholders approved a reverse stock split. Chris Hunt and Michael Blood were the only dissenting shareholders. Under Washington’s Dissenters’ Rights statute, RCW Ch. 23B.13, Hunt and Blood were entitled to the “fair value” of their shares, plus interest, as of the day before the reverse stock split. Sentinel estimated the fair value using a report that valued Hunt’s and Blood’s shares as of December 31, 2009, and issued checks to them. They both objected to the valuation report as outdated, and Sentinel petitioned the Superior Court for a determination of the shares’ value.

In discovery, Hunt and Blood initially refused to produce any expert report showing a higher per share value on the grounds that the experts had retained “as consulting experts only.” Although Blood alleged that the non-dissenting shareholders “concocted a plan” to force him out of the corporation and reached a secret agreement to artificially diminish the value of his shares, he did not explain the basis for those conclusions in response to Sentinel’s discovery requests. Sentinel then moved for summary judgment, arguing that Hunt and Blood did not have any evidence to refute the company’s valuation and that it was entitled to an award of attorneys’ fees and costs.

Hunt and Blood opposed that motion by claiming that Sentinel’s valuation was outdated and was based on an assumption that Sentinel would not grow in 2010 even though its financial records showed growth of 9 percent. They did not provide the financial documents. Hunt’s counsel filed an affidavit, which attached “a true and accurate copy” of a report from a valuation expert. He did not file an affidavit from the expert swearing to the truth of the report’s contents. Blood, in turn, reasserted his conspiracy theory, but did not provide any non-conclusory facts to support it.

The trial court found that counsel’s affidavit was not sufficient to authenticate the expert report or make it admissible evidence. Accordingly the trial court refused to consider it and, based on the admissible evidence presented, granted summary judgment determining the value of the shares and awarding Sentinel its attorneys’ fees and costs.

The Court of Appeals reversed on both issues, finding that irrespective of the admissibility of the expert report, a genuine issue of material fact existed simply because Hunt and Blood “assert[ed] that they had consulted an expert who disagreed with Sentinel’s valuation.” The Washington Supreme Court accepted review and unanimously reversed the Court of Appeals as to the value of the shares and affirmed as to the award of attorneys’ fees and costs.


Summary judgment is appropriate where “there is no genuine issue as to any material fact and … the moving party is entitled to a judgment as a matter of law.” CR 56(c). Under long-standing Washington law, a court may grant summary judgment only when viewing all facts and reasonable inferences therefrom in the light most favorable to the non-moving party, reasonable minds could reach only one conclusion.

The Supreme Court found that Blood’s belief of secret deals was nothing more than a conclusory fact, which was insufficient to preclude summary judgment. The Court likewise found that the assertion that Sentinel’s financial records showed 9 percent growth was conclusory because the financial records (or any other competent evidence) were not provided.

Turning to the report of the valuation expert, the Court found that it, too, was inadmissible. Counsel’s testimony that “a true and accurate copy” of the report was attached to his affidavit was not sufficient to authenticate it. The Supreme Court, thus, found such report inadmissible for purposes of summary judgment. And although the owner of shares of a closely held corporation may testify to the value of those shares, because Hunt and Blood’s testimony was based on unauthenticated conversations with experts—rather than firsthand knowledge or observation—the trial court could not consider it when ruling on summary judgment. Accordingly, the Court reversed the Court of Appeals and held the trial court properly entered summary judgment as to the value of the shares.

The Supreme Court, however, affirmed the Court of Appeals as to the award of attorneys’ fees and costs. Washington’s Dissenters’ Rights statute allows, but does not require, an award of fees in “amounts the court finds equitable … if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously, or not in good faith ….” RCW 23B.13.310. In this case, the Court found that the trial court’s failure to enter any findings of fact or conclusions of law justifying such an award, by itself, warranted remand. But the Court reversed the award all together, holding that a dissenting shareholder does not act arbitrarily, vexatiously, or in bad faith simply because he or she makes a demand for payment of fair value that is ultimately found to be unsupported or where the dissenter’s legal strategy was flawed.


This decision serves as a refresher of the evidentiary standards on motions for summary judgment in Washington. Bare assertions, speculation, hearsay, unsubstantiated “belief,” and other inadmissible evidence are insufficient to show that a genuine issue of material fact exists. An affidavit must be made upon personal knowledge, be supported by facts admissible in evidence, and show that the affiant is competent to testify to the matters stated therein. Evidence that does not satisfy these basic evidentiary rules will not preclude entry of summary judgment.